The California Bureau of Cannabis Control last week suspended the licenses of nearly 400 businesses — including nine in San Diego County — for failure to enroll in a system meant to keep tabs on the state's cannabis inventory.
The suspensions, which went into effect Friday, represent roughly 16% of the licensed retailers, distributors and testing facilities in the state.
The state's "track-and-trace" system was written into Proposition 64, the 2016 ballot measure that legalized cannabis for non-medical adult use. The system is designed to make sure licensed cannabis businesses don't let their products end up on the black market.
The state's vendor for the system is Metrc, a Florida-based company that provides similar services in nearly a dozen other states.
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Bureau of Cannabis Control spokesman Alex Traverso said the businesses were told they must enroll in Metrc within five days of receiving their provisional licenses. The agency followed up with a reminder roughly three months ago, he said, and then sent a final warning in late October.
"These are growing pains," Traverso said. "I think we knew it was going to be a process and it was going to take some time, and that it was going to be an adjustment period for a lot of people who have been doing things one way for some time now."
Among the nine business based in San Diego County with suspended licenses suspended, three were distribution companies: California Cannabis Group, Full Circle Ventures and Sherman Asset Management.
The other six were retailers: Olive Tree Wellness Center, Evergreen Evolution, La Mesa Health Center, Balboa Ave Cooperative, San Diego Recreational Cannabis (SDRC) and the San Ysidro branch of Urbn Leaf.
Gina Austin is an attorney who represents several local cannabis businesses including SDRC and La Mesa Health Center. She said La Mesa Health Center could not enroll in the track-and-trace system because it had not yet opened for business and did not have any inventory to put into the system.
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Austin added the track-and-trace software was confusing and neither the Bureau of Cannabis Control nor Metrc, the software vendor, have been good at responding to questions as her clients attempted to enroll in the system.
"If you're busy running a business and trying to make sure that you're compliant in every way, and you don't follow up with the bureau on a daily basis … you might have slipped through the cracks," she said.
Traverso said roughly 80 businesses enrolled in the track-and-trace system on the same day their licenses were suspended. Those licenses, he said, will soon be restored.
"It's relatively simple to get your license out of suspension," he said.
